Ahead of last week’s African Union ministerial meeting, prominent business leaders issued a letter to Heads of State to observe the 01 July deadline for the African Continental Free Trade Agreement to come into force. The signatories to the letter say that there is no legitimate reason to postpone the AfCFTA even if they understand that a staggered approach can be used given current circumstances. The letter was written in response to several media articles alleging that African Heads of State are considering to delay the implementation date. One of the signatories is Paulo Gomes, former Executive Director of the World Bank and Chair of the Executive Committee of AfroChampions. The AfroChampions network has been mandated by the African Union to coordinate private sector discussions around the AfCFTA. Gomes stated that the ministers had a duty to respect the current deadline. “We understand that certain parts of the AfCFTA are sensitive. The rules of origins and tariffs need time but we can start with trading of essential goods. That will send a strong message to the world that we are serious about the AfCFTA and to African businesses. The private sector is the biggest beneficiary of the AfCFTA and with supply chains being disrupted globally, it is even more urgent that we have a functioning system within the continent to create continental supply chains.” The signatories argued that governments were right to ensure that the immediate response was a health one. But the looming crisis is economic and the AfCFTA...

The first commerce under an Africa-wide free-trade pact will provide new stimulus to countries on the continent to overcome the economic damage of the coronavirus, even if it could be delayed for around six months, according to the most senior official of this agreement. The secretariat of the African Continental Free Trade Area is exploring the feasibility of moving talks involving more than 50 countries and real-time translation into four languages online. However, full border closures by some 30 nations aimed at limiting the spread of the virus is likely to restrict trade flows over the coming months, Wamkele Mene, the secretary-general said in an interview. While the agreement entered into force legally last year, protocols for trade in goods, including tariff concessions, need to be agreed for its implementation and commerce to start on July 1. Disruptions caused by the pandemic have set negotiations back by two and half months. “The consideration for postponement doesn’t mean that there no longer is political will and that there is no longer political commitment,” Mene said by phone from Addis Ababa on Wednesday. “We have to adjust to conditions that unfortunately nobody could have anticipated and we have to give the space to governments to solve the public health crisis as a matter of priority.” Customs Union Africa lags other regions in terms of internal trade, with intracontinental commerce accounting for only 15% of the total, compared with 58% in Asia and more than 70% in Europe. The agreement is meant to...

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African countries are facing a dual crisis – the impact of COVID-19 on their populations and the global economic slow-down which threatens to undo the hard-fought gains of the last 25 years Nestled in the undulating hills of central Ghana is a Fair Trade cooperative cocoa farm that produces chocolate for export to the world, including to supermarkets across the UK. When I visited the farm last summer, I saw for myself the many jobs the farm provides – many taken by women – and the families that these support. Consumers of the chocolate that originates from Ghana include, no doubt, thousands of workers in my constituency of Stafford, like those in the General Electric factory in Stafford. They manufacture transformers for the energy grid across the globe, including in developing countries like Ghana, where electricity supply can often be insecure or not available. That’s how trade works. Both sides win. For the UK and Africa, our two-way trade has enormous value – a total of £35.1bn of goods and services in 2018 according to ONS – creating and sustaining countless jobs across our country and on the continent. The Prime Minister has been quick to seize the opportunity. At the inaugural Africa Investment Summit in London earlier this year, he promised to renew our economic partnership with Africa, containing some of the fastest-growing economies in the world. Today, however, African countries are facing a dual crisis – the impact of COVID-19 on their populations and the global economic slow-down...

CEGA is committed to sharing a diversity of voices and perspectives. This post, written by Anthony Mveyange (EASST Fellow, TradeMark Africa) and Andrew Mold (United Nations Economic Commission for Africa), was originally published on the Brookings Institution website. Recent global trends like the COVID-19 pandemic, the climate change crisis, and heightened trade disputes among the world’s leading trade partners have highlighted the vulnerability of global value chains (GVCs). At present, the scale of the disruption in East Africa is quite dire — imports from China (a common source of intermediate goods) through the Mombasa Port declined by a drastic 20 percent shortly after the onset of the pandemic, between January and February 2020. In light of these trends, governments and industries in East Africa should consider rapidly shifting from focusing on global value chains (GVCs) to regional ones (RVCs). Given the region’s past difficulties with entering global value chains and consolidating the gains from regional integration processes, heightened emphasis on regional value chains could reap compounding benefits. The time is ripe: As documented in our recent report, the recently signed and ratified African Continental Free Trade Area (AfCFTA) can be the great enabler of that shift. THE STAGNATION IN GVCS The literature on GVCs emerged in the 1990s, after which the development community began to frame development success in terms of the ability of countries to insert themselves into these GVCs. Although not uncontested, academic research provided evidence of the benefits to workers and improved prospects for poverty reduction from participating in GVCs. However, the...

On February 27, Nigeria confirmed the first case of Covid-19 in Sub-Saharan Africa. Since then, the virus has spread to all corners of the continent. Even before the first cases were recorded in Africa, Covid-19 was already impacting international demand for exports in key sectors such as textiles and horticulture. Flower exports are down by more than 90 per cent and tourist arrivals have ground to a halt. The Kenya National Bureau of Statistics reported that imports dropped by more than 20 per cent in the first two months of 2020, with Chinese imports plummeting around 37 per cent. As the pandemic continues, the projected losses grow. Trade volumes in the EAC are down by up to 25 per cent since the beginning of 2020, with even greater reductions in the informal sector. African countries, conscious of the fragility of their public health systems and limited intensive care capacity, have instituted strict measures to stem the spread of the virus. However, for many in the region, their livelihood depends on moving about freely. There is no work-from-home option for the hundreds of thousands of small-scale traders. A day of work missed often translates to a day without food on the table. While health considerations are of primary importance, the prospects for tackling the challenges the pandemic presents are inextricably linked to trade and the economy. Continued trade at this time is crucial for three main reasons. First, trade is essential in ensuring people and governments have what they need to...

The Acting Chief Trade Negotiator/Director General, Nigerian Office for Trade Negotiations, Mr. Victor Liman, has said that the African Continental Free Trade Agreement (AfCFTA) is now expected to commence from January 1, 2021.Speaking on Nigeria’s Channels Television programme on Thursday, Liman  said that the AfCFTA, which was earlier scheduled to kick-off on July 1, 2020, was postponed due to the ravaging impact of COVID-19 pandemic on Africa. The Continental trade agreement entered its operational phase on July 7, 2019, following the ratification by 54 of all the 55 African countries. Liman disclosed that the Extraordinary Africa Union Summits scheduled to hold in South Africa on May 30, 2020 has been postponed to December 5, 2020. According to Liman, the summit is aimed at encouraging trade negotiators to complete their bargaining on tariff reductions, rules of origin and other necessary regulations and that the new date will also give sufficient time for trade ministers and their experts to finalise negotiations and prepare adequately for the Summits. The agreement for the largest regional market in the world was organised by the African Union and signed on by 44 of its 55 member states in Kigali, Rwanda on March 21, 2018. Source: Journal du Cameroun

THE private sector associations and corporates in the East African Community (EAC) are pushing for the six countries to embrace a recovery strategy in post Covid-19 pandemic dubbed BEABEA (Buy East Africa Build East Africa).That is a medium- and long-term approach as states have been called upon to provide support to key industries to expand their capacity and establish new industries to manufacture import substitutes in the region.Under the East African Business Council (EABC), the sector has called for partner states to consider improving the business and regulatory environment to ensure formalization of businesses in the region so as to spur improving the economy of partner states. EABC Chief Executive Officer (CEO), Dr Peter Mathuki said that when the pandemic is over, or even now that it is being controlled by individual states as well as the East African Community (EAC) Secretariat, such actions will spare the EAC economies from the negative impact of Covid-19. “There is need for EAC partner states to push for Buy East Africa Build East Africa (BEABEA). Partner States need to provide support to key industries to expand their capacity and establish new industries to manufacture import substitutes in the region. This will cushion the EAC economies from the negative impact of Covid-19,” said Dr Mathuki.In his remarks on effects of Covid-19 on trade in EAC, Dr Mathuki said that partner states – Tanzania, Kenya, Uganda, Rwanda, Burundi and South Sudan should facilitate the private sector to increase production of manufactured goods and ensure borders...

Freedom of movement and economic integration are the cornerstone of the African Union’s (AU) Agenda 2063 which includes, among other things, the progressive aim of abolishing visa requirements for all African citizens. However multiple obstacles to free movement on the continent persist. A protectionist approach to managing migration still prevails as states avoid ceding their sovereignty to regional and supra-national organisations in migration affairs in the name of state security and national interest. So far, with the exception of the Economic Community of West African States (ECOWAS), little tangible progress has been made to implement a free movement regime. In this context, the global COVID-19 pandemic and states’ responses to it, raise questions about open borders and free movement of people. By 29 April, more than 34 000 people in Africa were infected with the coronavirus and just over 1 500 had died. If governments struggle to contain the spread, strict immigration laws and the militarisation of border control may be invoked, as has happened in South Africa. These types of measures would be antithetical to the continent’s integration agenda. More than half of African countries have closed their borders to human traffic in response to COVID-19 As the pandemic flared up across Europe, borders were progressively shut down until the Schengen agreement was suspended. At the same time, populists have challenged the European Union (EU) borderless system in an attempt to crack down on immigration. French right-wing politician Aurélia Beigneux went further: ‘The free circulation of goods and people,...

May 5, 2020//-Ahead of the AU ministerial meeting on the 5-6th of May that will be discussing the trade response to Covid-19 and the state of the African Continental Free Trade Agreement (AfCFTA), a number of business leaders have signed a joint letter calling for ministers and Heads of State to ensure they stick to the deadline of July 1 for the Agreement to come into force. The letter has been written in response to rumours in international media that the AfCFTA date of July 1 will be postponed until next year. The signatories say that there is no legitimate reason to postpone the AfCFTA even if they understand that a staggered approach can be used given current circumstances. One of the signatories of the letter is Paulo Gomes, former Executive Director of the World Bank and Chair of Executive committee of AfroChampions. The AfroChampions network has been mandated by the African Union to coordinate private sector discussions around the AfCFTA. He said that ministers meeting next week had a duty to respect the current deadline. “We understand that certain parts of the AfCFTA are sensitive. The rules of origins and tariffs need time but we can start with trading of essential goods. That will send a strong message to the world that we are serious about the AfCFTA and to African businesses. The private sector is the biggest beneficiary of the AfCFTA and with supply chains being disrupted globally, it is even more urgent that we have a functioning...